Scotland’s charity watchdog has placed Shetland Charitable Trust under intense surveillance and may stop it conducting business if councillor-trustees are seen to have any more conflicts of interest.

OSCR cautioned the trust that any “inappropriate” practices or actions relating to councillor-trustees’ dual roles could prompt intervention, perhaps to restrict the trust’s ability to spend or receive income or to suspend any trustee or trust employee.

The unprecedented action, which will damage the trust’s reputation, is in reaction to its tortoise-speed approach to ending councillors’ stranglehold over the charity which has up to 22 councillors and only two appointed independents.

OSCR has already invoked its considerable powers to demand advance notice of all future trust meetings, copies of agendas and reports, draft and final minutes of every session, plus an explanation of how councillors deal with each potential conflict of interest as it emerges. A warning has been added that a team from OSCR may turn up at any future trust meeting.

Trustees are due to discuss the unprecedented threat to their freedoms at a meeting on Wednesday.

Their specialist lawyers Turcan Connell have advised them of the seriousness of the threat of action from OSCR if they are perceived to be in breach of statutory rules on conflicts of interest. Simon Mackintosh of Turcan Connell warned that the practical effect of OSCR’s monitoring regime “should not be underestimated”.

“The action which OSCR could take includes (in the case of misconduct) suspending a trustee or senior manager responsible for, or privy to, the misconduct or who has contributed to, or facilitated it, or who appears to be unable to, or unfit to, perform their functions in relation to the charity.”

OSCR’s heightened scrutiny follows February’s decision by the trustees to reject their own constitution reform proposals, which had taken a year to formulate. They agreed to put the matter off until after the next council elections in 2012, although it was agreed talks could continue in the meantime. The tactic effectively stuck two fingers up to OSCR and people in Shetland who have been calling for reform. The inaction was approved by the trust despite warnings from some trustees about the possible consequences.

The proposal they rejected was to replace the current format with 15 trustees made up of eight councillors and seven people selected from the community.

In a private meeting with trustees in June, OSCR made it clear that delaying change for two years was unacceptable. In the absence of progress it said there remained “a real risk both of systemic and specific conflict” which would impact on the trust’s ability to perform effectively and appropriately.

OSCR highlighted the need to address the problem of how the trust is perceived by others when making its decisions. In a letter to trust chairman Bill Manson in July the regulator said: “It is not solely about the way in which a decision is arrived at, but also about how the decision-making process and practice appears to others outwith the trustee body.”

OSCR’s head of inquiry and investigation Laura Anderson again implored the trust to “move forward to adopt different, less high-risk and more appropriate governance arrangements”.

Meanwhile, two anonymous complaints to OSCR from people in Shetland relating to the trust’s discussion of Viking Energy affairs in 2008 and 2009 have been rejected by the watchdog, partly because at the time it did not have proper procedures in place for taking action.

In one case the complaint about trustees deciding to invest in Viking was deemed inappropriate for OSCR to get involved with. “It appears to OSCR that the decision … was within the trust’s powers. OSCR does not have the discretion to overrule a charity’s decision, validly taken within its powers, on the grounds that others take a different view, however strongly held.”

The other complaint was similarly put to bed without recourse to action because “there does not appear to be sufficient evidence that the charity trustees who are also councillors acted in a way that resulted in the interests of the trust not being represented”.

About John Robertson

4 comments

John Robertson’s article on the Charitable fund 6/9/10 what has been the outcome of this debate about the OSCR recommendations?

If this group of councillor-trustees are holding meetings in secret and moving at the speed of a snail while making Investment decisions there is an interest of conflict there already. It would seem to me that the trust should be made up of the following type of people. Oil and Gas experts who know how to deal with leases in a fast efficent way with experience on how to extract the maximum income from Multinationals. On the trustees board which should be 50 percent non councillors. A International investment banker based in Edinburgh, Oil and Gas solicitors with International land Gas and Oil terminal lease deal experience. A Member the OSCR, an accountant, and several members of the shetland public.

The accounts should be printed each year and a copy put online as well as a hard back one place in the public area of the libraries and council offices for the public to read and copy. If councillors are unexperienced in the dealings of multinationals then they must be put on up to- date courses which are not held in shetlands, but in Aberdeen, Norway, as well as in USA.

World LIQUID NATURAL GAS prices are at an all time high and will go higher over the next 5 to 10 years the increase price of this”Scottish” product year in year out should be included in all incomes from the gas companies.

I would like to see the terms and conditions of the original agreements at Sullom Voe and the Terms and agreements of the New terminal printed online and paper copies handed out for all shetland people to see and comment on.

The final solution perhaps should be that this trust is seen as dated and out of touch with modern day buisness of The Oil and Gas industry. There is no room for anyone who thinks small, is slow, or people who think that a dinner, drink,funny handshake and a small present is a big deal coming from these mulitnationals this just called hospitality and is the industry norm.

Finally workshops should be set up with the finance of the trust and school leavers and long term unemployed or adults who are keen to re-learn new trades/ skills given the chance to participate in courses which, under the agreements with Gas companies they then should be employed on the terminals this would lead to full employment for eveyone on shetland, the girls should have the same oppertunities to learn and earn the same wages.

This idea would help to cut out the need to employ people from other parts, shetlanders in every job this should be the aim of this council first and formost investment in the people young and old. To build a standard of living NOW which would see no-one want to leave the Island.

There was no interest of conflicts when the Council was Zetland, Now there is an Interest of conflicts now the Council is Shetland, Now the interest of conflicts has been solved by Dave Heaney, He wants to bring in Bodie and Doyle and George from the Sweeney, We could use a good negotiator someone like old Arthur Daley, And why not Judge Judy and Rumpole of the Bailey, We could call on Tigger, Eeyore and Winnie the Poo, They could all get together and tell the council what to do, You could pay them in carrots and honey and a few back handers, And save all trust fund for the good of the Shetlanders.

Gordon you’ve waisted your time watching all those TV programme’s have ruined your life, the past is behind you get out of the chair stand up for your right’s, it’s never to late to take part in the debate. Shetland belongs to Scotland there is no Zetland anymore it’s been kicked oot the door, If councils cant be trusted Government must act to rid the Isles of so called trusts and kick them where it hurts.

YYYYYAAAAAAAAAAAAAAAAAAAAAAAAAAAWWWWWWWWWWWNNNNNNNNNNNN !!!!!!! I somehow think that went clean over the top of your head, never mind Dave you just keep on clinging to the lamp post for support. In other words my poem was WAISTED lol.

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